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FREE MOVEMENT OF EU CITIZENS: INCLUDING FOR THE POOR?
Paper to be presented at the ISLSSL 21st World Congress
Cape Town 15-18 September 2015
Author: prof dr Herwig VERSCHUEREN
Affiliation: Professor at the Faculty of Law, University of Antwerp, Belgium
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ABSTRACT
This paper analyses the ambiguity within the Union’s policy goals of free movement of Union
citizens and the combating of poverty and social exclusion. The former is viewed as a
fundamental right with constitutional status, whereas the latter is regarded as a central policy
objective of the EU.However, the right to free movement of economically inactive persons and to
equal treatment with the host State’s citizens with regard to social benefits is subject to the
economically inactive persons having sufficient resources. As a result, in practice the right to
free movement could very well become impossible for indigent people. This article examines the
legal context offered by the Treaty, secondary legislation (Directive 2004/38 and Regulation
883/2004) and the Court of Justice’s case law. It finds that the EU has problems in reconciling
the right to free movement and the policy objectives of fighting poverty and social exclusion. To
conclude, the paper presents some ideas and proposals on how this ambiguity and these
contradictions could be solved so as to guarantee the right to free movement for all, including the
poor.
§1. INTRODUCTION
The right of EU citizens to move freely within the EU Member States has evolved from a right
for economically active persons (within the context of Europe’s economic integration), to a right
for all EU citizens whether or not they are economically active. In parallel, the fight against
poverty and social exclusion is supposed to be at the core of the EU’s political agenda. However,
the right to free movement of economically non-active persons and to equal treatment with the
host State’s citizens with regard to social benefits is subject to them having sufficient resources
so as not to become an unreasonable burden on the host State’s social assistance system. As a
result, indigent people could very well be deprived of the right to free movement in practice,
which would amount to ambiguity between these two policy goals.
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Quite a large number of Union citizens are affected by this issue. Indeed, according to the most
recent figures published by Eurostat1, in 2013, 16.7% of the population of the European Union
were at risk of income poverty, meaning that their disposable income was below their national at-
risk-of-poverty threshold.2 These figures show that in total numbers more than 80 million EU
citizens live under the poverty threshold.
The issue is also high on the political agenda. At the Council’s request, the Commission
published a study on this issue in October 2013.3 In both the literature and consultations with the
stakeholders little evidence can be found to suggest that the main motivation of EU citizens to
migrate and reside in a different Member State is benefit-related as opposed to work or family-
related.4 However, based on very anecdotal evidence, politicians and the popular press in several
Member States openly criticized the fact that Union citizens from other Member States wanted to
make use of the social assistance schemes of the host State. It is not uncommon for migration of
this kind to be called ‘benefit tourism’. Some Member States’ political leaders openly proposed
to amend the rules on free movement, including the Treaty provisions, not only for economically
inactive Union citizens but also for workers.5
This paper analyses the ambiguity within the Union’s policy goals of free movement and the
combating of poverty and social exclusion. It starts by reiterating the legal meaning of the right to
free movement as well as the EU policy commitment to combat poverty. Next, it examines the
current rules and the case law of the Court of Justice (CJEU) on the right to minimum subsistence
benefits for migrant workers and persons who can rely on that status. The sometimes blurred
definition in EU law of who is economically active and who is not will also be examined. The
possibilities and limitations for indigent (economically inactive migrant) Union citizens to obtain
1 Eurostat Newsrelease, More than 120 million persons at risk of poverty or social exclusion in 2013, 4 November 2014, 168/2014. 2 This threshold is set at 60% of the national median equivalized disposable income. 3 ICF and Milieu Ltd, ‘A fact finding analysis on the impact on the Member States’ social security systems of the entitlements of non-active intra-EU-migrants to special non-contributory cash benefits and healthcare granted on the basis of residence’, Website of the European Commission (2013), http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=1980&furtherNews=yes#, p. 276. 4 This is also confirmed in other studies. See for instance: D Bräuninger, Debate on free movement. Does the EU need new rules on social security co-ordination? (Deutsche Bank 2015). 5 See for instance the proposals formulated on 28 November 2014 by D. Cameron, Prime Minister of the UK, BBC News, ‘David Cameron urges EU support for migration plans’, 28 November 2014, http://www.bbc.com/news/uk-politics-30224493.
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a right to reside in another Member State and have access to social minimum benefits there are
also assessed. This paper critically analyses the balance that the Court of Justice tried to strike in
its recent judgments, between the free movement rights and the Member States’ wish to limit
access to their solidarity systems. Finally, it presents some ideas and proposals on how this
ambiguity and these contradictions could be solved in order to guarantee the right to free
movement for all, including the poor.
§2. THE RIGHT TO FREE MOVEMENT WITHIN THE EU AS A FUNDAMENTAL
RIGHT
The right to free movement within the EU is first and foremost a right for those who are
economically active (Article 45 and 49 TFEU (Treaty on the Functioning of the European
Union)). The Maastricht Treaty of 1992 complemented this purely economic integration context
with a more politically oriented integration, most visibly expressed through the establishment of
European citizenship. A key element of this European citizenship was the creation of the Union
citizens’ right to move and reside freely within the territory of the Member States, irrespective of
the exercise of an economic activity, but subject to the limitations and restrictions laid down by
Union law (Article 8A EEC Treaty and now Article 21 TFEU). This right is also enshrined in
Article 45 of the Charter of Fundamental Rights of the EU.
The CJEU has recognized the direct effect of Article 21 TFEU, confirming that this right is
conferred directly on every Union citizen.6 The CJEU also observed that Union citizenship
confers on each citizen a primary and individual right to move and reside freely within the
territory of the Member States.7 The CJEU qualified this freedom to move and reside within the
territory of the Member States as a fundamental freedom guaranteed by the Treaty8 which must
be interpreted broadly.9 Hence, limitations and conditions laid down in EU law must be
6 Case C-413/99 Baumbast, EU:C:2002:493, para. 84 et seq. 7 Case C-162/09 Lassal, EU:C:2010:592, para. 29; Case C-434/09 McCarthy, EU:C:2011:277, para. 27; Cases C-424/10 and C-425/10 Ziolkowski and Szeja, EU:C:2011:866, para. 35 and 36; and Case C-220/12 Thiele Meneses, EU:C:2013:683, para. 19. 8 See recently: Cases C-523/11 and C-585/11 Prinz and Seeberger, EU:C:2013:524, para. 25; Case C-220/12 Thiele Meneses, para. 20; and Case C-275/12 Elrick, EU:C:2013:684, para. 20. 9 See inter alia Case C-200/02 Zhu and Chen, EU:C:2004:639,para. 31; Case C-408/03 Commission v. Belgium, Case C-408/03, para. 40.
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interpreted restrictively and applied in accordance with the principle of proportionality.10 In
Grzelczyk, the Court stated that the status of Union citizen is destined to be the fundamental
status of nationals of the Member States, a statement which later became paradigmatic, since it
was repeated on numerous occasions in subsequent case law.11 The Court also added that
therefore every Union citizen may rely on the prohibition of discrimination on grounds of
nationality laid down in Article 18 TFEU in situations relating to the exercise of the right to move
and reside within the territory of the Member States.12
§3. THE FIGHT AGAINST POVERTY AS A CENTRAL POLICY OBJECTIVE OF
THE EU
Ever since the launch of the Lisbon Strategy in the year 2000, the EU has paid full regard to the
fight against poverty and social exclusion when formulating policy objectives and creating
instruments. This objective was further confirmed in 2010 by the Europe 2020 Strategy, which
aims, amongst other things, at lifting at least 20 million people out of the risk of poverty and
exclusion by 2020.13 The main objective of these European policy initiatives is to support the
Member States in their national policies to combat poverty. However, they do not have a direct
impact on legal claims for financial or other support by persons faced with poverty or social
exclusion. Still, these objectives have found their way into legal instruments of the EU, and more
specifically, into the Treaties. Article 9 TFEU declares that ‘in defining and implementing its
policies and activities, the Union shall take into account requirements linked to (…) the fight
against social exclusion (…)’. Furthermore, Article 3(3) TEU (Treaty on European Union)
confirms that the EU shall combat social exclusion and Article 151(1) TFEU refers to the
10 Case C-413/99 Baumbast, para. 91; Case C-200/02 Zhu and Chen, para. 32; Case C-408/03 Commission v. Belgium, para. 39; Case C-162/09 Lassal, para. 29-31; and Case C-140/12 Brey, EU:C:2013:565, para. 70. 11 Case C-184/99 Grzelczyk, EU:C:2001:458, para. 31. See also, Case C-413/99 Baumbast, para. 82; Case C-148/02 Garcia Avello, EU:C:2003:539, para. 22; Case C-200/02 Zhu and Chen, para. 25; Case C-135/08 Rottmann, EU:C:2010:104, para. 43; Case C-367/11 Prete, EU:C:2012:668, para. 24; Case C-46/12 L.N., EU:C:2013:97, para. 27; Joined Cases C-523/11 and C-585/11 Prinz and Seeberger, para. 24; Case C-275/12 Elrick, para. 19; and Case C-333/13 Dano, EU:C:2014:2358, para. 58. 12 Case C-184/99 Grzelczyk, para. 31; Case C-224/98 D’Hoop, EU:C:2002:432, para. 28; Case C-148/02 Garcia Avello, para. 22 and 23; Case C-138/02 Collins, EU:C:2004:172, para. 61; Case C-224/02 Pusa,EU:C:2004:273, para. 16; Case C-367/11 Prete, para. 24; and Case C-333/13 Dano, para. 59-60. 13 See European Council, Conclusion of the European Council of 17 June 2010, EUCO 13/10. See also Communication from the Commission of 3 March 2010, Europe 2020 – A strategy for smart, sustainable and inclusive growth, COM(2010) 2020.
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combating of social exclusion as an objective of the Union and the Member States. Article 34(3)
of the EU Charter of Fundamental Rights also reflects these goals and Article 1 of this Charter
states that human dignity is inviolable and must be protected and respected.
There is no doubt that the fight against poverty and social exclusion is a policy objective which is
high on the political agenda of the European institutions and supported by provisions in the
Treaties as well as in the EU Charter.
§4. ACCESS TO MINIMUM SUBSISTENCE BENEFITS FOR MIGRATING EU
CITIZENS
Since the right to move and reside freely within the EU Member States is a fundamental right for
all EU citizens and the fight against poverty and social exclusion is at the core of the proclaimed
EU policy objectives, we should ask ourselves to what extent these two goals are (not)
compatible, more specifically with a view to the legal provisions and case law on the free
movement of persons. The question we would like to address in this paper is to what extent the
EU equal treatment provisions also guarantee the right to social benefits intended to support
indigent migrants. What is the balance between the claim for equal treatment and the concerns of
the Member States to protect their welfare systems against the burden laid upon them by such
claims from migrants coming from other Member States?
A. THE RIGHT TO MINIMUM SUBSISTENCE BENEFITS IN THE HOST STATE FOR
INDIGENT MIGRANT WORKERS
Migrant workers can rely on the prohibition of discrimination on grounds of nationality included
in Article 45(2) TFEU and Article 7 of Regulation 492/201114 (ex Regulation 1612/68).15 This
ban on discrimination refers to working conditions, but also to all social and tax advantages
granted by the legislation of the Member State of employment. The CJEU considers social
assistance to be such a social advantage.16
14 Regulation 492/2011 on freedom of movement for workers within the Union, [2011] OJ L 141/1. 15 Regulation 1612/68 on freedom of movement for workers within the Community, [1968] OJ L 275/2. 16 Case 249/83 Hoeckx, EU:C:1985:139; and Case 316/85 Lebon, EU:C:1987:302.
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The personal scope of these provisions has been interpreted very broadly by the CJEU. The fact
that the income from employment is lower than the minimum required for subsistence does not
prevent a person employed from being regarded as a ‘worker’ within the meaning of Article 45
TFEU, Regulation 1612/68 and what is now Regulation 492/2011.17 This is also the case when
the person in question seeks to supplement that remuneration by other means of subsistence such
as financial assistance drawn from the public funds of the State in which he/she resides.18
Apart from that, the provisions on residence rights in Directive 2004/3819 show that there can be
no resources requirement vis-à-vis citizens of other Member States who can prove that they are
working as employed or self-employed persons falling within the scope of the CJEU’s case law.
The same applies to their family members.20
This case law suggests that indigent migrant workers can claim social assistance and other
minimum benefits in the host country where they are economically active, and this on an equal
footing with the nationals of this host country. This is even the case when these workers only
provide a limited contribution to the economy of the host State. For the Court, being
economically active constitutes a sufficient link of integration, inter alia, because migrant
workers also contribute to the financing of the social policies of the host State by paying taxes.21
Still, in other and more recent case law, the CJEU seems to depart from this mechanical
application of the equal treatment provisions concerning migrant workers’ claims for social
benefits. In Geven, the CJEU stated that the fact that a non-resident worker does not have a
sufficiently substantial occupation in the Member State concerned constitutes a legitimate
17 Case 53/81 Levin, EU:C:1982:105, para. 15 and 16; and Case C-317/93 Nolte, EU:C:1995:438, para. 19. 18 Case 139/85 Kempf, para. 14; Case C-444/93 Megner & Scheffel, EU:C:1995:442, para. 18; Cases C-22/08 and C-23/08 Vatsouras and Koupatantze, EU:C:2009:344, para. 26-29; and Case C-46/12 L.N. 19 Directive 2004/38/EC on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, [2004] OJ L 158/77; 1st corrigendum [2004] OJ L 228/35; 2nd corrigendum (only for the English version), [2005] OJ L 197/34. 20 See Article 7(1)(a) and Article 14(4)(a) of Directive 2004/38. 21 Case C-542/09 Commission v. Netherlands, EU:C:2012:346, para. 65-66; and Case C-379/11 Caves Krier, EU:C:2012:798, para. 53.
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justification for refusing to grant the social advantage at issue.22 In addition, in Giersch, the
CJEU argued that a frontier worker is not always integrated in the Member State of employment
in the same way as a worker who is resident in that Member State. 23
Geven and Giersch constitute a remarkable departure from previous case law, since the CJEU
seems to indicate that migrant workers can no longer in all circumstances claim equal treatment
in the Member State where they work and first have to demonstrate sufficient integration into the
society of the host Member State before they can claim a benefit. This would amount to the
introduction of a ‘genuine link’ requirement which the CJEU has so far only applied for
economically inactive migrants.24
B. THE RIGHT TO MINIMUM SUBSISTENCE BENEFITS IN THE HOST STATE FOR
INACTIVE MIGRANTS WHO CAN RELY ON THE STATUS OF ‘WORKER’
In a number of cases, the CJEU also brought jobseekers within the scope of these EU provisions
on the right of free movement for workers. As a result, persons looking for a job in a Member
State other than their own for the first time were able to claim the financial support that a
Member State granted its own jobseekers. 25 However, the Court considered it legitimate for a
Member State to grant such an allowance only after a real link between the jobseeker and the
labour market of that Member State has been ascertained.26 This right to equal treatment can also
refer to a social minimum benefit as in Collins, which concerned the means-tested jobseekers
allowance in the UK, or in Vatsouras and Koupatantze, which concerned a dispute with regard to
a German basic benefit for jobseekers.
22 Case C-213/05 Geven, EU:C:2007:438, para. 26. For a critical comment: S. O’Leary, ‘Developing an Ever Closer Union between the Peoples of Europe? A Reappraisal of the Case Law of the Court of Justice on the Free Movement of Persons and EU Citizenship’, Yearbook of European Law (2008), p. 167-193; and P. Ploscar, The Principle of Solidarity in EU Internal Market Law (PhD, Department of Law, University of Antwerp, 2014), p. 237-240 and 317-318. 23 Case C-20/12 Giersch, EU:C:2013:411. 24 See more on this case law below in Section §3. B. 25 Case C-138/02 Collins, para. 56; Case C-258/04 Ioannidis, EU:C:2005:559; Cases C-22/08 and C-23/08 Vatsouras and Koupatantze, para. 36-37; and Case C-367/11 Prete, para. 25. 26 Case C-224/98 D’Hoop, para. 38; Case C-258/04 Ioannidis, para. 30; and Case C-367/11 Prete, para. 33.
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Other categories of economically inactive persons can also invoke the EU provisions regarding
the free movement of workers and the principle of equal treatment included therein. Indeed, the
European legislator confirmed in Article 7(3) Directive 2004/38 that in certain circumstances an
EU citizen can maintain his/her status as an employee or self-employed person. This is the case
when the Union citizen is temporarily unable to work as a result of illness or accident, or is in
duly recorded involuntary unemployment, or embarks on vocational training. In these
circumstances the person concerned not only retains the right to reside in the host State, but can
also claim the same treatment as the nationals of this host country with regard to all kinds of
social benefits. 27
Moreover, the CJEU recently confirmed that the list in Article 7(3) of Directive 2004/38
containing the circumstances in which migrant workers who are no longer in an employment
relationship may nevertheless continue to benefit from that status is not exhaustive. In Saint-Prix,
the Court stated that a woman who gives up work or gives up seeking work because of the
physical constraints of the late stages of pregnancy and the aftermath of childbirth retains the
status of ‘worker’ within the meaning of Article 45 TFEU, provided she returns to work or finds
a job within a reasonable period after the birth of the child.28
Furthermore, the right to access to social minimum benefits also applies to workers’ or ex-
workers’ economically inactive family members, even when they are no longer living together
with the worker in the host State. This was illustrated by the Court’s judgments in Ibrahim and
Teixeira.29 This means that these economically inactive family members of a person who at one
time worked as a migrant worker in the host country can continue to invoke the status of a family
member of a worker within the meaning of Regulation 1612/68 (now Regulation 492/2011) with
a view to maintaining an autonomous right of residence while the children pursue an education.
As a result of their EU status as family members of a worker they will also be able to claim the
social benefits the host Member State grants to persons lawfully residing in their territory (such
as housing assistance in Ibrahim and Texeira).
27 Cases C-22/08 and C-23/08 Vatsouras and Koupatantze, para. 31-32. 28 Case C-507/12 Saint-Prix. 29 Case C-310/08 Ibrahim, EU:C:2010:80; and Case C-480/08 Teixeira, EU:C:2010:83.
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From this case law, it can be inferred that even when they are inactive, in quite a number of
circumstances migrant persons within the EU can claim rights linked to the status of worker in
the host Member State, including access to social assistance or other social minimum benefits.
This also applies to certain family members of such workers, even when the worker has ceased to
be economically active in the host Member State or has returned to his Member State of origin.
C. ENTITLEMENT TO SOCIAL MINIMUM BENEFITS UNDER THE EUROPEAN
SYSTEM OF COORDINATION OF SOCIAL SECURITY SCHEMES IN
REGULATION 883/2004
The European system of coordination of social security schemes in Regulation 883/200430 (as
well as in its predecessor Regulation 1408/71)31 is designed to remove obstacles to the free
movement of persons resulting from the diversity of the social security systems of the Member
States. Economically inactive persons are also covered by this EU coordination system since in
the definition of its personal scope this regulation refers to all nationals of a Member State who
are or have been subject to the legislation of one or more Member States (Article 2), and no
longer refers to the status of employed or self-employed persons (as was the case in Article 2 of
Regulation 1408/71).
This EU social security coordination system guarantees that persons migrating within the EU can
keep their social security allowances (export of benefits) or have access to benefits in the new
host country through the mechanism of aggregation of periods or the right to equal treatment.
Therefore, this coordination is an important instrument in preventing poverty.
Regulation 883/2004 applies to all branches of social security.32 However, social assistance is
excluded from the scope of this coordination,33 even though the Court of Justice has always
30 Regulation 883/2004 on the coordination of the social security systems, [2004] OJ L 200/1. 31 Regulation 1408/71 concerning the application of the social security schemes to employees and self-employed persons, as well as to their family members travelling within the Community. 32 Article 3 of Regulation 883/2004 refers to the following branches of social security: sickness benefits; maternity and equivalent paternity benefits; invalidity benefits; old-age benefits; survivors’ benefits; benefits in respect of accidents at work and occupational diseases; death grants; unemployment benefits; pre-retirement benefits and family benefits. 33 Article 3(5) of Regulation 883/2004.
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interpreted this exclusion quite narrowly. In its case law the CJEU developed a broad definition
of social security, which also includes special non-contributory benefits that are half-way
between traditional social security and social assistance 34 Examples of such benefits are
supplements to pensions and special benefits for disabled or invalid persons. However, Article 70
of Regulation 883/2004 contains a special coordination regime for this type of benefits as they
shall be provided exclusively in the Member State in which the persons concerned reside. The
only requirement for entitlement to these benefits is the person’s place of residence, defined in
Article 1(j) of Regulation 883/2004 as the place where a person habitually resides.
Yet, the CJEU recently decided that these ‘special non-contributory cash benefits’ must also be
qualified as ‘social assistance’ within the meaning of the provisions of Directive 2004/38.35 This
qualification has important consequences for the entitlement of migrant persons to these benefits
in the host State. In Dano, the CJEU specified that economically inactive Union citizens cannot
claim equal treatment with nationals of the host State for these ‘special non-contributory cash
benefits’ in the first three months of residence. For periods of residence longer than three months
but shorter than five years they are only entitled to equal treatment for these benefits if their
residence complies with the provisions of Directive 2004/38. The latter is only the case if such an
economically inactive Union citizen has sufficient resources for himself/herself and his/her
family members.36 This case law actually adds a supplementary condition to the entitlement to
these benefits which is not included in Regulation 883/2004 itself. Clearly, the recent judgments
of the Court will make it more difficult for economically inactive EU migrants to rely on the
social minimum benefits listed in Annex X to Regulation 883/2004. There can be no doubt that
this result jeopardizes the right to free movement of indigent persons.
34 See for instance Case 1/72 Frilli, EU:C:1972:56 ; Case 187/73 Callemeyn, EU:C:1974:57; Case 63/76 Inzirillo, EU:C:1977:18; Case 139/82 Piscitello, EU:C:1983:126; Cases 379-381/85 and 93/86 Giletti and others, EU:C:1987:98; Case C-356/89 Newton, EU:C:1991:265. 35 Case C-140/12 Brey, para. 61; and Case C-333/13 Dano, para. 63. 36 Case C-333/13 Dano, para. 69-76.
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D. THE RIGHT TO FREE MOVEMENT FOR ECONOMICALLY INACTIVE PERSONS
AND EQUAL TREATMENT IN THE HOST STATE FOR MINIMUM SUBSISTENCE
BENEFITS
The above analysis shows that a large number of persons migrating within the EU can invoke the
prohibition of discrimination on grounds of nationality to exercise rights regarding social
minimum benefits in the host country because of their status as workers or self-employed persons
or a status linked to this capacity. However, if migrant Union citizens do not belong to the
category of economically active or post-active persons, their recourse to social assistance in the
host Member State is much more controversial, both legally and politically.
The starting point of the discussion is the statement by the Court of Justice that non-economic
migration between Member States also triggers the application of the Treaty prohibition of
discrimination on grounds of nationality in the host Member State (now Article 18 TFEU).37 In
its case law prior to the coming into force of Directive 2004/38, the CJEU confirmed that this
principle also applies to social assistance benefits38, as well as to other non-contributory benefits,
such as student maintenance grants.39 Nevertheless, in these rulings the CJEU accepted possible
justifications for derogations of equal treatment with regard to social minimum benefits, provided
the proportionality test is met.
Depending on the case, the applicant should ‘not become an unreasonable burden on the public
finances’40, ‘have a genuine link with the employment market of the State concerned’41, or ‘need
to demonstrate a certain degree of integration into the society of the host State’.42 For the Court,
requiring a genuine link with the host Member State could be a legitimate objective, adequate to
37 See for the first time Case C-85/96 Martinez Sala, EU:C:1998:217; and most recently confirmed in Case C-333/13 Dano, para. 59. 38 Case C-184/99 Grzelczyk; and Case C-456/02 Trojani. 39 Case C-209/03 Bidar. 40 Case C-184/99 Grzelzyck, para. 44; and Case C-75/11 Commission v. Austria, EU:C:2012:605, para. 60. 41 Case C-138/02 Collins, para. 67-69 and Cases C-22/08 and C-23/08 Vatsouras and Koupatanze, para. 38 and 39. 42 Case C-209/03 Bidar, para. 57. See also Case C-258/04 Ioannidis, para. 30 et seq.; Case C-158/07 Förster, EU:C:2008:630, para. 54; and Case C-103/08 Gottwald, EU:C:2009:597, para. 32 et seq.
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justify restrictions on the right to move and reside freely in the territory of the Member States.43 It
would seem that the requirement of a genuine link with the host Member State is an attempt to
strike a fair balance between the rights of economically inactive migrants and the Member States’
legitimate wish to protect their national welfare systems.44
This approach is reflected by the EU legislation in Directive 2004/38. In its Article 24(2) Ttis
directive provides) for a derogation of the principle of equal treatment for social assistance during
the first three months of residence of economically inactive persons, for jobseekers as long as
they continue to seek employment and have a genuine chance of being engaged and, for students,
even during the first five years as regards maintenance aid for studies.45 In addition, Article 14(1)
provides that Union citizens have the right to three months’ residence in the host Member State,
as long as they do not become an unreasonable burden on the social assistance system of the host
Member State. Moreover, the right of residence for more than three months and the retention of
this right for economically inactive persons is conditional upon the citizens having sufficient
resources for themselves and their family members so as not to become a burden on the social
assistance system of the host Member State (Article 7(1(b)) and Article 14(2) Directive
2004/38).46 Only after five years of legal residence in the host Member State a migrant EU citizen
is granted the right to permanent residence (Article 16), and in that case he or she is no longer
subject to any subsistence requirement. The status of permanent resident offers the citizen in
question a full right to equal treatment with the nationals of that State, including for matters of
social assistance.
Nonetheless, after the entry into force of Directive 2004/38, discussions continued on what
exactly could be considered as an ‘unreasonable burden’, which benefits should be regarded as
43 D. Thym, ‘Towards “Real” Citizenship? The Judicial Construction of Union Citizenship and its Limits’, in M. Adams et al. (eds.), Judging Europe’s Judges. The Legitimacy of the Case Law of the European Court of Justice (Hart, 2013), p. 162. 44 Case 413/99 Baumbast, para. 90; Zhu and Chen, para. 32; and Case C-408/03 Commission v. Belgium, para. 37 and 41. In the same vein: K. Lenaerts, ‘European Union citizenship, National Welfare Systems and Social Solidarity’, 18 Jurisprudence (2011), p. 398-400; E. Spaventa, in U. Neergaard, R. Nielsen and L. Roseberry (eds.), The Role of Courts in Developing a European Social Model. Theoretical and Methodological Perspectives, p. 146; and P. Minderhoud, ‘Directive 2004/38 and Access to Social Assistance’, in E. Guild, C. Gortazar Rotaeche and D. Kostakopoulou (eds.), The Reconceptualization of European Union Citizenship, p. 210-212 and 223-224. 45 Which the CJEU approved in Case 158/07 Förster. 46 See Cases C-424/10 and C-425/10 Ziolkowski and Szeja, EU:C:2011:866, para. 39-41; and Case C-333/13 Dano, para. 70-73.
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social assistance and on the question whether the Member State of residence could subject access
to social benefits to compliance with the necessary requirements for obtaining a legal right of
residence in the host Member State on the basis of this directive.
In its most recent case law, the CJEU tried to find an answer to these questions. In Brey the Court
stated that national authorities cannot conclude that a person has become an unreasonable burden
without first carrying out an overall assessment of the specific burden which granting that benefit
would place on the national social assistance system as a whole, by reference to the personal
circumstances characterizing the individual situation of the person concerned. The Court
indicated that the national authorities may take into account, inter alia, the amount and the
regularity of the income which the economically inactive migrant person receives, the fact that
those factors have led those authorities to issue him/her with a certificate of residence and the
period during which the benefit applied for is likely to be granted to him/her. In addition, in order
to ascertain more precisely the extent of the burden which that grant would place on the national
social assistance system, the Court considered that it may be relevant, agreeing on that point with
the Commission, ‘to determine the proportion of the beneficiaries of that benefit who are Union
citizens in receipt of a retirement pension in another Member State’.47
It seems that with this judgment the CJEU has increased rather than alleviated the legal
uncertainty and confusion created by its previous case law referred to above, in particular when it
comes to determining what an ‘unreasonable burden’ is.48 Indeed, given that it remains unclear
on the basis of which elements and according to which procedure the national court should make
such an assessment, Brey only created more confusion and legal uncertainty.
In its ruling of 11 November 2014 in Dano, the Court attempted to clarify this. In essence, the
Court stated that economically inactive Union citizens can only claim equal treatment for social
benefits with nationals of the host State, as guaranteed by the TFEU as well as by Regulation
883/2004 and Directive 2004/38, if their residence on the territory of that State complies with the
47 Case C-140/12 Brey, para. 78. 48 For a more detailed analysis of this judgment, including its relevance for the meaning of Regulation 883/2004 on the social security coordination see H. Verschueren, ‘Free movement or benefit tourism: the unreasonable burden of Brey’, 16 European Journal of Migration and Law (2014), p. 147-179.
15
conditions of Directive 2004/38. In the period of residence between three months and five years
in the host State, those conditions include the requirement that economically inactive Union
citizens must have sufficient resources for themselves and their family members (Article 7(1)(b)
of Directive 2004/38). Therefore, Member States have the possibility of refusing to grant social
benefits to Union citizens who exercise their right to free movement solely in order to obtain
another Member State’s social assistance benefits although, upon arriving on the territory of that
State, they do not have sufficient resources to claim a right to reside. In order to determine
whether these persons meet the latter condition, their financial situation should be examined in
detail, without taking account of the social benefits claimed.
However, this judgment allows both a strict and a broad interpretation of the possibilities the host
Member States would have to deny a Union citizen the right to equal treatment as regards social
benefits. As far as a strict interpretation is concerned, one could deduce from paragraphs 78 and
66 of this judgment that the Court limits the scope of the derogation from the equal treatment
principle to situations in which Union citizens’ only motive for moving to another Member State
is to obtain social assistance. This means that it should be clear from the very beginning of their
residence that they have no intention of integrating into the host society (for instance by taking up
or seeking employment). Such a derogation would be justified as it is intended to prevent ‘benefit
tourism’ and an unreasonable burden on the host State’s social assistance system. In such cases,
no further proportionality test or ‘genuine link’ test would be required. In all other circumstances,
the limitations to the right to equal treatment should continue to be subject to such a
proportionality test.
Still, the wording of this judgment would also allow a broader interpretation of the possibilities
the host Member State have to derogate from the prohibition of discrimination on grounds of
nationality for the granting of social benefits to economically inactive Union citizens. In
paragraph 69 the Court states that ‘a Union citizen can claim equal treatment with nationals of the
host Member State only if his residence in the territory of the host Member State complies with
the conditions of Directive 2004/38’ (emphasis added). In paragraph 73, the CJEU states that for
those persons whose period of residence in the host Member State has been longer than three
months but shorter than five years, Article 7(1)(b) subjects the right to reside to ‘the requirement
16
that the economically inactive Union citizen must have sufficient resources for himself and his
family members’. Accordingly, the Court adds in paragraph 82 that national legislation may
exclude nationals of other Member States who do not have a right of residence under Directive
2004/38 in the host Member State from entitlement to certain ‘special non-contributory cash
benefits’.
Moreover, the Court does not limit the exceptions to the equal treatment provisions to social
assistance benefits alone. In paragraph 73 as well as in paragraphs 74, 77 and 78, the Court refers
to the claim of ‘social benefits’ in general, without, however, defining this concept.
Therefore, the Court’s analysis of the meaning of Directive 2004/38 could be interpreted to the
effect that Member States are allowed to refuse to pay any social benefits, including social
security benefits, to economically inactive Union citizens who do not have the right to reside
under Directive 2004/38 because they do not possess sufficient resources of their own.
However, it is not clear what the consequences of this case law would be for the host Member
State’s ability to expel Union citizens who do not possess sufficient resources. Indeed, Article
14(3) of Directive 2004/38 expressly provides that expulsion measures shall not be the automatic
consequence of a Unions citizen’s recourse to the social assistance system of the host State. Is
such a measure still subject to the ‘unreasonability’ test the Court adopted in Brey? And what if
the expulsion is not allowed on the basis of such a criterion, but the citizen involved can be
refused access to social benefits in the host State on the basis of the Court’s reasoning in Dano?
This kind of situation would manifestly result in the creation of poverty on the territory of the
host State, which would be in contradiction with the objectives of the Union as enshrined in
provisions such as Article 3(3) TEU, Articles 9 and 151(1) TFEU as well as Articles 1 and 34(3)
of the EU Charter of Fundamental Rights.
It is submitted that such a broad interpretation would be contrary to the abovementioned
principles and objectives of the EU on the free movement for persons, including those who are or
17
who become economically inactive.49 It remains to be seen whether the Court would indeed adopt
such a broad interpretation in its future case law. Therefore, if we want to know exactly what the
consequences will be we will have to await further case law of the Court in this matter. The
Court will undoubtedly be confronted with new cases on these issues, the advantage of which is
that it will have the opportunity to clarify its case law.50
§5. FREE MOVEMENT: INCLUDING FOR THE POOR?
The above analysis reveals the ambiguity between the EU’s objective of guaranteeing the right to
free movement of persons and equal treatment on the one hand and the objective of fighting
poverty and social exclusion on the other. The balance the Court of Justice has had to find is not
just a balance between legal and political objectives at EU level but also between these objectives
and the Member States’ interests.
Recent studies of the European Commission show that migration within the EU is only inspired
by benefit tourism to a small extent.51 The findings of this study can be summarized as follows:
non-active EU migrants represent a very small share of the total population in each Member
State. On average, EU migrants are more likely to be employed than nationals living in the same
country. Pensioners, students and jobseekers accounted for more than two-thirds of the non-
active EU migrant population (71%) in 2012. The vast majority of non-active EU migrants (79%)
live in economically active households and the majority of them have previously worked in the
current country of residence (64%). Evidence also shows that the vast majority of migrants move
to find (or take up) employment and that this remains the key motive for intra-EU migration.
Moreover, activity rates among such migrants have increased over the last 7 years. The study
found little evidence in the literature and stakeholder consultations to suggest that the main
motivation of EU citizens to migrate and reside in another Member State is benefit-related as
49 For a further in-depth analysis of the judgment in Dano see also: D. Thym, ‘The Elusive Limits of Solidarity: Residence Rights of and Social Benefits for Economically Inactive Union Citizens’ (2015) 52 CML Rev 17-50; and H. Verschueren, ‘Preventing “Benefit Tourism” in the EU: a Narrow or Broad Interpretation of the Possibilities Offered by the ECJ in Dano’ (2015) 52 CML Rev 363-390. 50 See in particular the already pending cases: Case C-67/14 Alimanovic, [2014] OJ C142/14; Case 299/14 Garcia Nieto [2014]OJ C 315/38; and Case C-308/14 Commission v. United Kingdom, [2014] OJ C 329/2. 51 See references in footnote 3.
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opposed to work or family-related. This is underpinned by data showing that in most countries
immigrants are not more intensive users of welfare than nationals.
Therefore, one could wonder why the entitlement to social benefits for economically inactive
migrating Union citizens is an issue at all. It could very well be more a matter of perception and
political sensitivity than of reality. Nonetheless, the legitimacy of the entitlement of indigent EU
migrants to social minimum benefits in the host State is more disputed than ever. This clearly
affects the way the CJEU handles this issue. As recently illustrated by its judgment in Brey and
Dano, the Court tries to reconcile the right to free movement, including that for inactive persons,
with the Member States’ justified concerns to protect their social system from unwanted
intruders.
Meanwhile some ideas have been put forward for new legislative initiatives in this field.52 One of
the ideas is to extend the waiting period of three months in Article 24(2) of Directive 2004/38
before a migrating economically inactive person is entitled to social assistance benefits in the
host State. In the interim period, such a person would continue to be entitled to the social
assistance benefits of his/her home State, which would then be obliged to export these benefits.
Introducing a cost compensation mechanism between the former Member State of residence and
the new State of residence for residence-based minimum subsistence benefits could also alleviate
the burden on the latter state. Such a system would entail the reimbursement by the first Member
State of the benefits paid by the latter. It could be limited to a certain length of time (one year),
after which the host State would take over the financial responsibility for the payment of social
minimum benefits. Such a reimbursement system already exists in the context of the EU social
security coordination system of Regulation 883/2004. For the costs of medical care, Article 35 of
Regulation 883/2004 provides for a reimbursement system between the Member State of
insurance and the Member State in which the medical treatment has been provided. In addition,
Article 65(6)-(8) of Regulation 883/2004 introduces a limited reimbursement system for the costs
of the unemployment benefits provided by the Member State of residence for workers who, 52 Some of the following suggestions are taken from: F. Van Overmeiren, E. Eichenhofer and H. Verschueren, in E. Guild, C. Gortazar Rotaeche and D. Kostakopoulou (eds.), The Reconceptualization of European Union Citizenship, p. 258-262. For other suggestions see also: A.P. van der Mei, Free Movement of Persons within the European Community. Cross-Border Access to Public Benefits (Hart, 2003), p. 203-220.
19
before their unemployment, worked as frontier workers in another Member State. These
examples show how a cost compensation mechanism in the field of social security could operate
at EU level. Even the creation of an EU fund for the purpose of cost compensation for social
minimum benefits paid to indigent migrant persons was suggested, so that the cost of providing
such minimum support would be shared and distributed among all the Member States.53 This
solution would prevent an indigent migrant person from falling between two stools in this period.
Such a person would at any time be entitled to social minimum benefits in some Member State.
However, the political feasibility of such compensation schemes is questionable.
Some plead for the adoption of an EU instrument regarding the minimum income the Member
States would have to provide to the persons living on their territory54 Such an instrument could
take the form of an EU Framework Directive on the adequacy of minimum income schemes,
which would include agreed common criteria.55 However, it remains uncertain whether the
Treaties contain a legal basis for such an instrument, and it is even more uncertain whether there
is the political will to adopt it.56
A comparable idea would be the adoption of an EU instrument introducing common standards for
the protection of vulnerable people in need, including basic forms of support, shelter and aid for
the destitute and homeless. Such standards should correspond to the basic human rights
responsibilities of the Member States.57 Interestingly enough, such an instrument already exists
for a specific category of third-country nationals, namely asylum seekers. Indeed, Directive
2003/9 on minimum standards for the reception of third-country asylum seekers provides for the
53 G. Vonk, ‘Homelessness and the Law: Challenges for the European Union’, Paper presented at the 21st International Conference of Europeanists, Washington D.C., 14-16 March 2014, p. 15. See also A.P. van der Mei, Free Movement of Persons within the European Community. Cross-Border Access to Public Benefits, p. 210-211. 54 See for instance M. Ferrera and S. Sacchi, ‘A More Social EU? In What Areas? In What Forms’, 1 European Governance (2007), p. 18. 55 H. Frazer and E. Marlier, Minimum Income Schemes Across EU Member States (EU Network of National Independent Experts on Social Inclusion, 2009), p. 13 and A. Van Lancker, Working document on a Framework Directive on Minimum Income (European Anti-Poverty Network, 2010), p. 22. 56 On the discussion of the legal basis for an EU instrument creating the right to a minimum income, see H. Verschueren, ‘Union Law and the Fight Against Poverty: Which Legal Instruments?’, in B. Cantillon, H. Verschueren and P. Ploscar, (eds.), Social Inclusion and Social Protection in the EU: Interactions between Law and Policy (Intersentia, 2012), p. 208-213. See also: P. Schoukens and J. Beke Smets, ‘Fighting Social Exclusion under the EU Horizon 2020. Enhancing the Legal Enforceability of the Social Inclusion Recommendations?’, 16 European Journal of Social Security (2014), p. 51-72. 57 See G. Vonk, Homelessness and the Law: Challenges for the European Union, p. 16-18, for a more detailed presentation of this idea.
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obligation of Member States to take measures with regard to material reception conditions in
order to ensure a standard of living adequate for the health of applicants and capable of ensuring
their subsistence. The Directive specifies that the ‘material reception conditions’ shall mean
reception conditions that include housing, food and clothing, provided in kind or as financial
allowances or in vouchers, and a daily expenses allowance.58
In a recent judgment, the CJEU confirmed that these provisions observe the fundamental right
laid down in Article 1 of the Charter of Fundamental Rights of the European Union, under which
human dignity must be respected and protected. According to the CJEU, where a Member State
has opted to provide the material reception conditions in the form of financial allowances, those
allowances must be sufficient to ensure a dignified standard of living adequate for the health of
applicants and capable of ensuring their subsistence by enabling them to obtain housing, if
necessary, on the private rental market.59 Comparable obligations are also laid down in the
recently adopted Directive 2013/33 which will replace Directive 2003/9 from 21 July 2015.60
Therefore, EU law obliges Member States to provide an adequate standard of living for all third-
country nationals present on their territory who have applied for international protection. The
CJEU has explicitly linked this requirement to the obligation under Article 1 of the EU Charter to
respect human dignity. Therefore, suggesting that such a requirement should also be introduced
for indigent EU citizens who have made use of their fundamental right to free movement would
be very reasonable.
Moreover, recently the EU has set up a fund in order to support the Member States in providing
material assistance to the most deprived. The Fund for European Aid to the Most Deprived
(FEAD) created by Regulation 223/201461 and worth €3.8 billion in real terms from 2014-2020,
will financially support Member States’ actions to provide a broad range of non-financial
material assistance, including food, clothing and other essential goods for personal use for
materially deprived people. It complements the Structural Funds. The FEAD is a recent example
of how the EU could alleviate the financial burden of providing assistance to deprived persons.
58 See Article 2(j) and Article 13(1) and (5) of Directive 2003/9/EC laying down minimum standards for the reception of asylum seekers, [2003] OJ L 31/18. 59 Case C-79/13 Saciri and others, EU:C:2014:103, para. 35-42. 60 See Articles 2(g), 17 and 21-24 of Directive 2013/33/EU laying down standards for the reception of applicants for international protection, [2013] OJ L 180/96. 61 Regulation 223/2014 on the Fund for European Aid for the Most Deprived, [2014] OJ L72/1.
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§6. CONCLUSION
From the above analysis, it follows that the EU has difficulties in reconciling the right to free
movement of persons and to equal treatment as a fundamental right on the one hand with the
policy objectives of fighting poverty and social exclusion, explicitly laid down in the Treaty
provisions and policy documents, on the other. As a result of the European integration as an
economic principle, economic migrants almost automatically have access to financial support by
the host State to help them avoid poverty. It demonstrates the resilience of the EU’s market
integration rationale and the dominance of ‘mercantile’ citizenship.62However, we see that the
most recent case law seems to impose prior integration conditions on economic migrants as well.
Conversely, non-economic migrants face legal limitations on the fundamental right to free
movement and to equal treatment. Their right to reside in a Member State depends on not being
an unreasonable burden on the social assistance system of the host State. Indigent EU migrants
even face the risk of being expelled from the Member State where they reside because of the
burden they would place on the host State’s social assistance system.63 Limitations on their right
to equal treatment for social minimum benefits may lead to destitution as a consequence of the
exercise of the fundamental right to free movement.
It appears that the EU conditions imposed upon economically active as well as inactive migrants
to obtain the right to reside in and to social benefits from the host State are not based on a
genuine sense of solidarity. The discussions about the impact of EU law on the boundaries of
national solidarity systems question the extent to which European integration can legitimately
contribute to a cross-border form of solidarity between Member States and their citizens. The
fundamental right to free movement as well as to equal treatment seems to conflict with the
62 See for a recent analysis: C. O’Brien, ‘I Trade, Therefore I am: Legal Personhood in the European Union’, 50 CMLR (2013), p. 1643-1684. See also F. De Witte, ‘Transnational Solidarity and conflicts of Justice’, 18 EL Journal (2012), p. 705-706; N. Nic Shuibhne, ‘The Resilience of EU Market Citizenship’, 47 CMLR (2010), p. 1597-1628; P. Ploscar, The Principle of Solidarity in EU Internal Market Law, p. 241-242; and D. Schiek, Economic and Social Integration. The Challenge for EU Constitutional Law (Edward Elgar, 2012), p. 48-49. 63 Recently a question submitted to the Commission in the European Parliament (Parliamentary question E-000183-14) revealed that for this reason, Belgium had expelled 343 EU citizens in 2010. In 2011, their number grew to 989, and in 2012 it doubled, reaching 1,918. In the first nine months of 2013, another 1,130 EU citizens were expelled for this reason.
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traditional territorial understanding of interpersonal solidarity which presupposes ‘the
“willingness” of citizens to share with “others” within the same “political community”’.64 Such a
willingness seems to be the pre-condition to create a solidarity mechanism of its own aimed at
preventing and alleviating destitution by redistributing resources at EU level.
Apart from the structural funds, the EU currently lacks a redistribution instrument and criteria for
distributive justice. As Poiares Maduro has put it: ‘This limited version of the European social
self does not really recognize Europe’s right and legitimacy to establish and exercise and
independent redistributive function.’65As a result, European citizenship continues to lack the
‘social’ dimension as defined by Marshall.66 This is still the domain of the Member States. It
explains the ambiguity between free movement and the combating of poverty on the one hand,
and the Member States’ concerns to protect their social systems from ‘foreign intruders’ on the
other. It also contrasts with the US federal integration process which has created a shared
responsibility for welfare with the US Constitution, thus enabling the federal government to
adopt redistributive policies via tax-and-spend power. In the US, poverty problems caused by the
‘migrating poor’ are perceived as issues requiring cooperation of the states and the federal
government, based on a sink-or-swim-together rationale, which no longer entitles states to
exclude indigent migrants coming from other US states who want to reside on their territory from
social assistance.67
A comparable redistributive system is still lacking at EU level, the introduction of which would
need a stronger political commitment to an EU-wide fight against poverty and social exclusion
and the will to transfer powers and financial resources to the EU. The recently established Fund
for European Aid to the Most Deprived is a modest first example of how the EU could possibly
take more redistributive initiatives. However, it remains to be seen if the EU will be able to
develop more advanced redistribution systems. Meanwhile, the right to social minimum benefits 64 See also F. De Witte, 18 EL Journal (2012), p. 697; and M. Ferrera, The Boundaries of Welfare (Oxford University Press, 2005), p. 46. 65 M. Poiares Maduro, ‘Europe’s Social Self: The Sickness Unto Death’, in J. Shaw (ed.), Social Law and Policy in an Evolving European Union (Hart, 2000), p. 341. 66 T.H. Marshall, Citizenship and Social Class and Other Essays (Cambridge University Press, 1950). 67 A.P. van der Mei, Free Movement of Persons within the European Community. Cross-Border Access to Public Benefits, p. 178-203. See also A.P. van der Mei, ‘Freedom of Movement for Indigents: a Comparative Analysis of American Constitutional Law and European Community Law’, 19 Arizona Journal of International and Comparative Law (2002), p. 803-861.
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for migrant EU citizens will remain nested in the national systems and the nation-bound forms of
solidarity.68 In this context, the EU cannot but take into account the Members States’ wish to
protect their welfare states from intruders. Therefore, the EU will continue to struggle with the
ambiguity of its legal instruments and policy goals and will remain far from the objective which
van der Mei formulated as follows: ‘When taken seriously, Union citizenship ought to be
developed in such a way that both the “rich and the poor” can enjoy the rights that come with
it.’69
68 M. Ferrera, ‘Modest Beginnings, Timid Progress: What’s Next for Social Europe’, in B. Cantillon, H. Verschueren and P. Ploscar (eds.), Social Inclusion and Social Protection in the EU: Interactions between Law and Policy, p. 17-27 and P. Ploscar, The Principle of Solidarity in EU Internal Market Law, p. 215-216 and 317. 69 A.P. van der Mei, Free Movement of Persons within the European Community. Cross-Border Access to Public Benefits, p. 220.
